Productivity is no free lunch

Athens, Nov. 3, 2015: Young people in Europe want nothing to do with liberalized labor markets and strongly oppose cuts in the social safety net (source: dpa)

Europe is worried about low and declining productivity growth. Most politicians and experts have a simple solution: more high-tech investments and more education, especially for young people. But it is questionable whether this proposed fix is realistic or will bring about the desired outcome.

The educational visions that guided many West European countries over the past four decades have mostly disappointed. Taxpayers’ money has been lavished on school systems that fail to inculcate the skills and adaptability needed in modern economies.

As long as these systems remain in place, productivity growth will be stagnant and youth unemploymen...

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